Tuesday, May 31, 2011

We have a natural gas outdoor grill which I really like because I don't need to use a propane tank. It is a small grill with very basic features which I purchased at a year-end clearance for $150 seven years ago. While the body is still in very good condition, the internal heating elements are in very poor shape. For the past couple years, I've been checking local stores for another natural gas grill, but only found models which required a natural gas conversion kit. However, I didn't want to pay $400+ dollars for a new natural gas grill.

By chance, I noticed a phone number for the manufacturer on the serial number plate of the grill. I called and found out that the company sold replacement parts for my grill. For about $60, I was able to replace all the heating element parts. For another $50, I decided to order a few additional new parts such as grill racks and a spark ignitor box. Within a couple hours, I was able to install the new parts and have essentially a new grill on the inside. (For reference, the spark ignitor box appears to be the wrong part, and I will need an exchange.)

Today, we used the grill and it worked like it was new. Hopefully, the refurbished grill will give us five more years of use:-)

For more on Ideas You Can Use, check back every Tuesday for a new segment.list

Monday, May 30, 2011

In November 2010, I stopped selling into the rally and began adding significant funds into stock investments. I continued to make large new stock purchases via managed accounts through January 2011. I made some additional small purchases in April and May.

With the recent market weakness, I am becoming concerned about a major correction. To me, the market conditions feel like early 2008, when major issues, such the Bear Stearns and sub prime collapse, were being dismissed. In 2008, I stayed in the market, expecting a soft landing. Boy, was I ever wrong and my savings and retirement accounts fell by 40%.

I am not making the same mistake again.

This week, I will start reducing the amount of funds we have invested in stocks. However, I won't completely cash out. For now, my plan is to get our percentage invested in stocks back to pre November 2010 levels.

For more on Strategies and Plans, check back every Monday for a new segment. This is not financial or investment advice. Please consult a professional advisor.

Sunday, May 29, 2011

In October 2007, the economy and stock market was doing great. Early retirement seemed like a great idea. Analyses of various scenarios showed that retiring early was unlikely to be a failure.

Now, three and a half years later, the world is very different from my expectations of late 2007. The economy went into a great recession and the stock market crashed concurrently with significant declines in house prices. My retirement and savings accounts were reduced by 40% before recovering to being down about 25%.

Needless to say, early retirement for me has been a bumpy road :-)

So here's my new financial scenario for retirement:

Low investment returns returns. Instead of 6-7% annualized returns, I'm counting on (hoping for:-) 3-4% returns. Gone are the days of 8-10% returns that fueled retirement accounts over the past 20 years,

Lower Social Security and Medicare benefits. Currently, I am not eligible for Social Security or Medicare and my age is in the gray zone where benefits may or may not be reduced. With the current state of the deficit, I expect my benefits will likely be lowered.

No returns from housing. I am planning on little to no gain from the home we own. In fact, I hope it's worth more that we paid for it when we sell in 15 years :-)

Retirement in the next 15 years won't likely be as "easy" as retirement was in the 15 years prior to the Great Recession. The past three years have been a difficult lesson in retirement economics. We've adjusted our retirement plans significantly and in 2013, we'll learn if the right adjustments were made.

For more on New Beginnings, check back every Sunday for a new segment.

This is not financial or retirement advice. Please consult a professional advisor.

Thursday, May 26, 2011

In my daughter's kindergarten class, the student were given three principles for their behavior in class:

Take care of yourself.

Take care of others.

Take care of your environment.

I thought these were great principles, not only for kindergarten, but for life. The best part is that my daughter can recite these three principles verbatim. Thus, if there is ever a coaching opportunity, I can refer to these three principles as a foundation.

For more on Crossing Generations, check back every Thursday for a new segment.

Wednesday, May 25, 2011

It's been over four years since I started My Wealth Builder. As I think about topics to write , I often remember, "I've written about that before," and decide to find a new topic. However, since many principles of personal finance are timeless, I want to include them in a recent post on My Wealth Builder. Therefore, I have started a series called "Timeless Articles from the Archives" which highlights posts from the same week in 2007-2010.

The New Entrepreneurship - I read this article by Penelope Trunk when I was still working. She was right about having control over my work and a flexible lifestyle making me happier. For reference, my approach is to work part time jobs that have very flexible hours.

Tuesday, May 24, 2011

Welcome to the fortieth edition of The Wealth Builder Carnival. The purpose of this carnival is to collect articles from the blogosphere on building, preserving and keeping enough wealth for a comfortable retirement. For reference, I have tried to keep the carnival content tightly focused on wealth building and did not include submissions that were off topic. For reading convenience, the posts are listed with a brief summary or comment by the submitter and organized them into seven categories: Earning, Insuring and Protecting, Investing, Living Frugally, Retiring, Saving and Taxes.

Tarik presents Anything worthwhile needs 8 hours of continuous work.. posted at Success starts today, saying, "There are many types of work that may take from a few minutes to a few hours, but valuable work needs time. Time needs to be booked without interruption for long periods. To be able to make progress on all my activities and improve my earnings, I use several techniques to block and reserve my time and work on my most valuable goals. Here are three tips on how you can create blocks of time that will make every day of your life worthwhile."

Dividends4Life presents 18 Stocks Meeting The Goal Of Higher Dividends posted at Dividend Growth Stocks, saying, "I have stated many times that my goal is to create an ever growing income stream from dividend growth stocks. Secondarily, it is my desire to beat the S&P 500 over time. With that said, I rarely look at the capital performance of individual stocks. What I do watch is the ability of the stocks I own to sustain their dividend growth."

Investor Junkie presents Firstrade Review posted at Investor Junkie, saying, "Firstrade was exactly the kind of discount broker I was looking for. The fees are low, customer service is excellent, and the website is always trouble free. I have been satisfied with Firstrade and will probably stay with them in the foreseeable future."

Living Frugally

Hussein Sumar presents What Can Bankruptcy do for you and what can it Not do? posted at Chapter 7 bankruptcy, saying, "Bankruptcy is an effective tool for thousands of Americans who are struggling with all kinds of debts. However, it is important to know what type of debts bankruptcy can discharge you from (in other words what types of debts it can ‘free’ you from) and what type of debts are NOT discharged through bankruptcy."

Tom presents Are All Coupons Worth It? posted at StupidCents, saying, "I’ve been starting to feel the drag of spending 30-45 minutes each week searching for printable coupons I could use at the grocery store. I started to question whether or not all coupons are worth it."

Retiring

Jim Yih presents Retirement Planning Mistakes posted at Retire Happy Blog, saying, "When people get concerned about their preserving money and having enough of it and wanting to keep it close to the vest, what types of investments do they often make?"

Saving

None

Taxes

Pamela King presents 24 Ways to Save on Your Tax Preparation Fees posted at Generation X Finance, saying, "ome of these so-called “organization” tips may seem like common sense, but the truth is, not being prepared for tax time can cost you quite a bit of money. If you have an accountant do your taxes and throw a shoebox full of receipts at them, it’s likely they will charge you the extra time required to get it organized – especially if it’s something you could’ve done yourself."

Monday, May 23, 2011

Here is our Q1 2011 Wealth Builder Ratios update. During the first quarter of 2011, the Dow, Nasdaq and S&P500 indices continued to rally and advanced 6.4%, 4.8% and 5.4% respectively. Unfortunately, our investment portfolio returns were negative at -4.3% due to a decline in my company stock of 4.3% return during Q1.

2011 has started out poorly due to a negative return for my company stock. As my company stock (hopefully) advances, we plan to continue selling shares and increasing diversification, primarily in large cap dividend paying stocks.

Savings to Salary
Target>20
2007=23 2008=16.7 2009=15.3

16.6

15.9

For now, it feels like our retirement savings have stabilized which gives me some confidence of better returns coming.

(For reference, Salary refers to gross salary just prior to early retirement in October, 2007.)

Both #1 and #2 were directlycorrelated with how well our stock, bond, and CD investments returns. With the poor performance of my company stock and the high proportion of cash, our portfolio returned less than the indices in Q1.

It has been very challenging retiring at the beginning of a bear market. Our short term expenses (next 3-5 years) are invested in CDs, bonds and money markets. So we can wait for the stock market to continue an upward trend, hopefully through 2012. I continue to be concerned about volatility of our investment portfolio, but believe there is more upside than downside potential going forward.

I continue to have the same financial goals for 2011. Hopefully, the markets will continue to rebound in 2011, and allow our retirement investments to further recover.

For more on Strategies and Plans, check back every Monday for a new segment.

Sunday, May 22, 2011

When I decided to un-retire for nine months, I initially expected there wouldn't be significant, unexpected disruptions to my retirement life. The role allowed me to work from home and was expected to take 15-20 hours at the beginning and transition to 40 hours per week at the end. I knew that the last few months were going to be a full time job and was prepared for that situation. However, after three months, I've learned that I've made two miscalculations:

Way underestimated the initial time needed. While I expected a 40+ hour workweek in the final three months, I thought I could start with 15-20 hours a week initially which would allow me continue my retirement lifestyle and activities for the first six months. However, the 40 hour workweek started right away and has significantly impacted my ability to maintain non-work activities.

Felt like I was always at work. Since I was telecommuting, there was no difference between my home and office. It was too easy to spend small amounts of time doing work since I was always "at the office."

To correct for my miscalculations, I am starting a standard work week, i.e. Monday to Friday from 9am - 5pm. This will provide me the discipline of separating myself from the work by limiting most of my work effort between those times. I expect this change to improve my work and non-work situation for the remaining time of my employment contract.

For more on New Beginnings, check back every Sunday for a new segment.

This is not financial, retirement or career advice. Please consult a professional advisor.

Saturday, May 21, 2011

Based on the part time jobs done in retirement, I've identified the following elements as being important for my perfect retirement job:

Seasonal. I like jobs that last a maximum of a few months, end and then start up again. Usually, after a few months, I need a break from the job. However, after a break, I am ready to do the job again.

Flexible part time hours. I like to be able to schedule hours that are convenient for me. The part time jobs that I have kept all allow me to choose my work hours.

Working with clients. I enjoy working directly clients who need my expert services. I enjoy seeing satisfied clients who get immediate positive benefits from working with me.

Good pay. I target for pay rates in the $10-$20/hour range. I won't work as a contractor, which would require me to pay self employment taxes. I only will accept pay as W-2 wages, since the employer pays FICA and Medicare taxes.

So far, I've found two jobs that meet these criteria: teaching enrichment classes, and seasonal tax preparation. A third job, tutoring for college entrance exams (SAT/ACT), is not seasonal but meets the other criteria.

I look forward to working only these jobs again, when I go back into retirement again later this year :-)

For more on Reaping the Rewards, check back every Friday for a new segment.

This is not financial or retirement advice. Please consult a professional advisor.

Thursday, May 19, 2011

Today, I weighed myself and the result was less than my starting weight as a college freshmen, which was almost 35 years ago. That is a 10% reduction in weight since I retired in October 2007. My next goal is to reach my heaviest weight in high school which will require another 5% reduction from my October 2007 value.

Unfortunately, I haven't regained any of the speed, stamina or toughness that I had as a college freshmen :-) Still, I am glad to have loss the weight.

For more on Crossing Generations, check back every Thursday for a new segment.

This is not financial or weight loss advice. Please consult a professional advisor.

Wednesday, May 18, 2011

It's been over four years since I started My Wealth Builder. As I think about topics to write , I often remember, "I've written about that before," and decide to find a new topic. However, since many principles of personal finance are timeless, I want to include them in a recent post on My Wealth Builder. Therefore, I have started a series called "Timeless Articles from the Archives" which highlights posts from the same week in 2007-2010.

Wednesday, May 11, 2011

It's been over four years since I started My Wealth Builder. As I think about topics to write , I often remember, "I've written about that before," and decide to find a new topic. However, since many principles of personal finance are timeless, I want to include them in a recent post on My Wealth Builder. Therefore, I have started a series called "Timeless Articles from the Archives" which highlights posts from the same week in 2007-2010.

2007

Retirement Planning By Age - Retirement planning and saving does different by age group and also depends how much has been done at earlier ages.

Tuesday, May 10, 2011

Welcome to the thirty-ninth edition of The Wealth Builder Carnival. The purpose of this carnival is to collect articles from the blogosphere on building, preserving and keeping enough wealth for a comfortable retirement. For reference, I have tried to keep the carnival content tightly focused on wealth building and did not include submissions that were off topic. For reading convenience, the posts are listed with a brief summary or comment by the submitter and organized them into seven categories: Earning, Insuring and Protecting, Investing, Living Frugally, Retiring, Saving and Taxes.

Investing

Dividends4Life presents 10 Dividend Stocks Paying More Cash posted at Dividend Growth Stocks, saying, "Payback is the amount of time needed for an investment to earn its cost, undiscounted. Though not very sophisticated, payback can still help you screen for good, solid dividend growth stocks. Once you earn back your investment, some might say you are in a no-lose situation."

Jessica S presents Finance Definitions: Principal posted at MomVesting, saying, "In finance we hear the term "principal" quite a bit -- but we all know we're not talking about our favorite education professional. So when talking personal finance, what is principal?"

Hussein Sumar presents S&P 500 Dividend Aristocrats of 2011 posted at Best Dividend Stocks, saying, "The S&P 500 Dividend Aristocrats Index is the most honorable list of dividend paying stocks as measured by the S&P 500 Index that have consistently increased their dividends for the past 25 years, without missing a single dividend payment. The index measures the performance of large cap, blue-chip companies within the S&P 500 that have a market capitalization of at least $3 billion."

Friday, May 06, 2011

"If you want something, ask for it. The worst that can happen is the answer is 'no.'" ~ me

On May 1, 2011, I received a 50% raise. How did I get it? The simple answer is that I asked for it. However, the story is a just a bit more complex than that :-)

First, the raise was not a surprise. As part of my employment contract, I negotiated 50% raise after 3 months and a 33% raise after 6 months. The raise was part of the agreed terms in the offer of employment I accepted.

Second, my initial salary was below market rates. I was willing to start at a lower salary since the organization is a non-profit with a mission for which I have passion. However, the longer I am employed, the closer I want my salary to be at market rates. For reference, I am filling the role while the organization is doing a search to hire a permanent employee for the position.

Third, the job is only for a limited time. So the magnitude of raises do not need to be maintained for an extended period. For me, the job will end by 2012 or sooner, if a permanent employee is found to fill the position.

For now, I am still enjoying the job, even though I way underestimated the initial work load by about a factor of two. The 50% raise does help increase my satisfaction and motivation. However, I am still looking forward to returning to retirement at the end of 2011.

For more on Reaping the Rewards, check back every Friday for a new segment.

Wednesday, May 04, 2011

It's been over four years since I started My Wealth Builder. As I think about topics to write , I often remember, "I've written about that before," and decide to find a new topic. However, since many principles of personal finance are timeless, I want to include them in a recent post on My Wealth Builder. Therefore, I have started a series called "Timeless Articles from the Archives" which highlights posts from the same week in 2007-2010.

Understand the Rules First Before Bending Them - One should understand the principles of basic financial concepts before venturing into more complex financial products.A "None of the Above" Option is Needed - What our election system needs is a "none of the above" voting option. That way we give the political parties and their candidates a reality check since I believe "none of the above" would be a winner in many races :-) .

To me, the content of these posts are still relevant today and worth reading again.

For more on The Practice of Personal Finance, check back every Wednesday for a new segment.

This is not financial, retirement, parenting, political or saving advice. Please consult a professional advisor.

About Me

My wealth goal is to create a guaranteed yearly income stream equal to my highest salary for my retirement years. While I have developed a strategy to do this,
I am interested how others are thinking of achieving financial security for retirement.
This blog is a summary of facts, ideas, discussions, and action plans to achieve that goal.

Disclaimer

This is a personal blog about my thoughts, experiences and ideas on building wealth. The contents of this blog are for informational purposes only. No content should be construed as financial advice. Commenters, advertisers and linked sites are entirely responsible for their own content and do not represent the views of My Wealth Builder. All financial decisions involve risks and results are not guaranteed. Always do your own research, due diligence and consult your own professional advisor before making any decision. My Wealth Builder assumes no liability with regard to financial results based on use of information from this blog.

If this blog contains any errors, misrepresentations, or omissions, please contact me or leave a comment to have the content corrected.

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Disclaimer:
This is a personal blog about my thoughts, experiences and ideas on building wealth. The contents of this blog are for informational purposes only. No content should be construed as financial advice. Commenters, advertisers and linked sites are entirely responsible for their own content and do not represent the views of My Wealth Builder. All financial decisions involve risks and results are not guaranteed. Always do your own research, due diligence and consult your own professional advisor before making any decision. My Wealth Builder assumes no liability with regard to financial results
based on use of information from this blog.

If this blog contains any errors, misrepresentations, or omissions, please contact me or leave a comment to have the content corrected.